Spain’s 10-year benchmark yield climbed 0.11 percentage point to 5.30%, the highest since mid-December, according to Tradeweb. The equivalent Italian yield was 0.07 percentage point higher at 4.39%.

The impact was also felt in currency markets, with the euro trading as low as $1.3592 against the dollar, over a cent weaker from Friday’s high of $1.3711, the strongest in more than 14 months.

Spanish Prime Minister Mariano Rajoy has promised to disclose his tax returns and financial assets this week, as he moved to contain a scandal over alleged payouts to him and other leaders from a secret account maintained by his conservative Popular Party.

Bond markets already saw volatile trading last week, in the run-up to this month’s elections in Italy, widely seen as a referendum on the government’s austerity program.

“Political turmoil represents the main risk to the powerful easing of tensions witnessed since the last summer,” said interest rate strategists at Commerzbank.

“The uncertainty from the accusations has the potential to weigh on sentiment, giving investors second thoughts about overweight positions in the periphery in general and Spain in particular at current spread levels,” they added.

The rise in Spanish yields once again raises the specter that the country could be forced to seek an international bailout, a prospect that had receded in recent months as market tensions eased.

“For as long as this situation continues, it will be very difficult for the government to impose further austerity on the country. The possibility that Spain may fail to do so, and may thus fail to close its budget deficit, increases the risk Spain will be pushed towards a bailout after all,” said interest rate strategists at Rabobank International.

Still, with the European Central Bank’s bond-buying plans still in the background, investors are unlikely to panic just yet. Mr. Rajoy’s party enjoys a solid majority in Parliament, and national elections are three years away.

Despite the potential for short-term uncertainty, Commerzbank strategists expect Spanish 10-year yields to fall to 4.5% later this year.